Modularization : the art of making more by using less

In his book, Modularization, Martin Sköld shows how companies and organizations in all industries, can release their greatest competitive potential. Although this potential exists, it is often ignored, which means most businesses rely on only a single competitive advantage.

Some organizations are like a subway. They are experts in creating high volume by transporting thousands of people every day. The high volume is a prerequisite for low costs, but this also means that goods and services are general and are the same for everyone. Therefore, the subway cannot transport each customer exactly where they want to go; they can only follow certain routes.

Other organizations are like a cab, specializing in handling high variety and driving the customer exactly where they want to go. The high variety provides customer value and revenue benefits because the product or service is flexible and customized to suit each customer's unique needs. But the high variation also means that volume is low, as the number of customers per taxi is low. Volume and variety pull organizations in opposite directions and they are forced to make a trade-off.

However, with a clear structure, and many good examples, Martin shows that modularization is the foundation to achieving double competitiveness. It is a strategy to beat the trade-off between volume and variety. It combines the benefits of high volume and high variety and provides a strong competitive advantage by combining low costs with high revenue. It is a strategy which can be applied across all types of industries and in the private and public sector.

Author: Martin Sköld is a researcher at the Stockholm School of Economics and divides his time between academia and industry. Brought up in a family business and with fifteen years of management research in major international corporations, he has acquired unique competencies and extensive knowledge within his field. He is a very popular speaker for managers and leaders at all organizational levels.

Endorsements:

Martin describes the challenges we face daily. Finally, a practical handbook that explains what to do and how to think in order to be competitive in different ways at once. The book accurately summarizes how companies and organizations can sharpen their competitive edge in an ever-changing world using simple and smart tools. Read it!

Azita Shariati, CEO Sodexo AB

This book clarifies to us at Scania what lies behind our success. It explains the thoughts and actions underlying the concepts that have long been part of our culture, but which can be difficult to understand. The book is easy to read and pedagogical, but with sharp insights. Next time someone asks me why Scania is a successful company, I will answer; ´It is because Scania has solved the tradeoff between volume and customization!´ We will use this book as our handbook at Scania, so that our employees can better grasp why we do the things we do. If you want to understand why and how read the book!

Henrik Henriksson, President & CEO of Scania